ARIN Counsel:

Observer:

Bernadette Lewis, Secretary General, CTU
(present for part of the meeting)

1. Welcome

The Chair called the meeting to order at 7:45 a.m. EDT. The presence of a quorum was noted, as was the presence of staff.

2. Agenda Bashing

The Chair called for any comments. There were no comments.

3. Approval of the Minutes

Scott Bradner, as Secretary, moved that:

"The ARIN Board of Trustees approves the Minutes of January 6, 2007 as written."

This was seconded by Paul Vixie. The Chair called for comments. There were no comments.

The motion carried unanimously.

4. Treasurer's Report

A. Acceptance of Audit Report. The Treasurer reviewed the draft financial statements from the Auditors and their recommendation. The Auditors had no negative comments to report to the Board. Paul Vixie stated that Section 3, Page 8 called "fees owed", as opposed to a voluntary contribution (regarding ICANN); and asked if this wording could be of any detriment to ARIN. Counsel stated ARIN pays a flat amount and it would be best to have listed as a voluntary contribution. The Secretary remanded the report back to the auditors for editing. The Treasurer stated that this would be presented as a Draft Audit Report at the Member's Meeting.

Bill Woodcock joined the meeting at this time (7:50 a.m. EDT).

B. ARIN Legal Defense Fund. The Treasurer stated that the Auditors suggested a line be added to the Balance Sheet to designate reserves as Legal Defense Fund. The Auditors stated this would require Board action.

Lee Howard, as Treasurer, moved that:

"The ARIN Board of Trustees directs the Treasurer and staff, in the future preparation of Balance Sheet or Statement of Financial Position, to present as a line item a Legal Defense Fund, under the category of Designated Net Assets, and that this item should be in the amount of One Million Dollars."

This was seconded by Scott Bradner. The Chair called for any comments. Discussion ensued on the visibility of having this fund. Counsel felt it was a positive showing ARIN was ready to defend a major lawsuit, if the need arose.

The motion carried unanimously via roll call vote.

C. Informational Items.

1. The Treasurer reviewed ARIN's Revenue Recognition Policy. The Secretary stated monies should be projected as ‘un-collectibles' versus ‘fees owed', and asked to have the term changed. The Treasurer agreed to the change and stated that ARIN will be recognizing revenue in this way in the next fiscal year.

The Chair explained that the recognition practice will change so that it will be based on a staff estimate of whether or not fees are collectible versus the historical case of when the check comes in. The Finance Committee (FINCOM) recommends ARIN do just this. He stated that no board action was required since this is an accounting practice. Bob Stratton stated that this is a catch up with overdue fees. It is a generally accepted accounting principle (GAAP) practice, now that we can estimate them, and create a reserve.

The Chair thanked him for the information.

2. New rules for Credit Card Processing. The Treasurer stated that ARIN would be engaging an outside auditor to ensure it was in compliance with the new payment card security standards. Bill Woodcock asked how often this should occur. The Secretary stated it should occur once a year as part of the regular audit. The Chair asked if there would be a delta on credit card processing fee, or terms, with the outside audit. The Secretary stated there would not be a delta since ARIN is required to be compliant with the security standards; and, the audit is a way for ARIN to ensure its compliance.

The Chair asked if the money to pay for the audit was in the reserve section of the budget. The President responded that the money was there. The Chair asked if there were any objections to asking for the audit. There were no objections. The Chair stated ARIN should proceed with the special audit. The Secretary stated that the FINCOM had already done this, since hiring auditors was the responsibility of the FINCOM under the ARIN Bylaws.

3. Controls Audit. The Treasurer stated he was collecting bids for a new controls audit. He stated there were changes to the rules for auditing non-profit organizations as part of the fall-out from Sarbanes/Oxley, and that a revised or new auditing contract was needed to deal with the new rules.

4. Fees. The Treasurer stated that revising ARIN's fee schedule is still under discussion. Ray Plzak stated he had forwarded suggestion to the FINCOM from the Suggestion Process regarding fees. The Treasurer stated that it would be reviewed by the FINCOM.

5. Changes to the ARIN Bylaws

Article VI, Section 14. Document Requirements. Annually, at or before its first meeting of the year, all members of the ARIN Board of Trustees shall complete and sign a set of documents which will attest to the trustee's agreement to comply with various ARIN policies and proceduresidentified in various sections of these bylaws. These documents will be on a list adopted by the Board. The Board will from time to time review these documents for pertinence and may revise existing documents or add or delete documents from the adopted list of documents. These documents are publicly available on the ARIN website."

This was seconded by Ray Plzak. The Chair called for any comments. The Board discussed the motion and decided it needed some additional work.

Scott Bradner moved to table this matter as consensus could not be reached. He suggested further discussion on the Board's list. This was seconded by Bill Manning.

The Chair called for any objections to tabling this item. There were no objections. The Chair stated it would be on the agenda for the next Board meeting.

The Chair announced an Executive Session at this time (8:20 a.m. EDT).

6. Counsel's Report.

Counsel provided an Attorney/Client privileged and confidential briefing to the Board.

7. ICANN/NRO Contract

The President updated the Board on this matter.

8. Observer of the Meeting.

The President noted the presence of Bernadette Lewis, Secretary General of the Caribbean Telecommunications Union (CTU); and introduced her to the Board.

9. Any Other Business

The Chair called for any other business. There was no other business.

10. Adjournment

The Chair entertained a motion to adjourn at 8:50 a.m. EDT. Scott Bradner moved to adjourn, and this was seconded by Lee Howard. The motion carried unanimously.